China’s export dependency grows

New light has been shed on the critical question of whether domestic growth in China, and Asia, can substitute for slowing western growth. It turns out, according to research by the Royal Bank of Scotland, that both have become more export-intensive in recent years, not less:

• China’s exports were just 20% of GDP in 2001. But by last year, they were 37% of GDP.
• Asia’s export dependency has also increased. Exports accounted for less than 25% of regional GDP in 1980 for Asia (ex-China, Taiwan and Japan). Now they are more than 50%.

The clear conclusion is that Asia’s economies did well whilst the West grew, and companies outsourced much of their basic manufacturing activity. China’s slowing polymer demand may well be the first sign that slowing western growth is now about to impact Asia as well.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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